This thesis argues that, under certain conditions, economic liberalization can strengthen the political position of conservative coalitions in transitional democracies. A large body of literature on the effect of market-opening reforms and democratization posits that economic liberalization, by generating social change, creates new opportunities for political reform. This viewpoint, while not unchallenged, appears to be predominant within academic circles. Through an empirical analysis of two case studies, Taiwan and South Korea, this study contributes a new perspective to the debate over the political effect of economic liberalization. The analysis of these two countries focuses especially on the impact of market-opening reform on the electoral-ideological area of political life, an area (termed "political space" by this thesis) to which most existing literature seems to attach only secondary importance (as it focuses primarily on institutional dynamics). Taiwan began its democratization process in 1987 with the lifting of martial law, while the first measures to liberalize the island's economy were implemented in the 1980s. However, as economic and institutional reform progressed throughout the 1990s, conservative political elements (represented mainly by the Kuomintang) have managed to maintain their dominance over Taiwan's political space. A similar development can be observed in South Korea, where in spite of growing economic de-regulation and the financial crash of 1997 (through which additional neo-liberal reforms have been imposed on South Korea's economy) conservative politicians and parties appear to have retained their dominance over this country's political space. As in Taiwan, the liberalization of political institutions and the economy since 1987 (when authoritarian tule in South Korea ended) have not brought about the triumph of pro-reform political forces. This thesis concludes by outlining some theoretical lessons extracted from the case studies that might translate into useful generalizations on the political effect of economic liberalization.
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Thesis advisor: Kawasaki, Tsuyoshi
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